Grocery stores are beginning to hoard food and other critical items in preparation for rising prices and demand across the country.
Supermarkets are hoarding things like baking ingredients and frozen meat as executives are anticipating some of the highest price increases observed in recent years, according to The Wall Street Journal.
“We’re buying a lot of everything,” David Smith, chief executive officer of Associated Wholesale Grocers Inc., said.
“Our inventories are up significantly over the same period last year.”
Associated Wholesale Grocers, the wholesaler for over 3,000 grocery stores, recently purchased 15 to 20 percent more inventory, Smith said.
Some grocery stores are buying and storing supplies to keep their shelves full in response to an increase in demand.
Paul McLean, the chief merchandising officer of Stew Leonard’s, told Insider the supermarket chain is purchasing 50 percent more inventory than usual.
“We’re buying more ingredients for home cooks — including flour and spices,” McLean said.
“We are also buying ahead on cleaning products for the fall and back to school.”
They are also buying more paper products and imported goods, along with frozen food.
As prices rise, grocery stores often purchase a stockpile of inventory in order to protect their profit, according to The Wall Street Journal. Other grocery stores are raising prices to minimize losses.
Although the supermarket industry has bounced back from the shortages caused by the COVID-19 pandemic, many are still running low on items and receiving about 80 percent of their orders from suppliers.
The stockpiling practice is also putting stress on a U.S. food supply chain that is already struggling.
“It runs the risk of making a bad situation worse,” Mark Griffin, president of B&R Stores Inc., told The Wall Street Journal.
The consumer price index, which includes food, energy, groceries and housing costs, increased 5 percent from a year ago, the fastest pace since 2008, CNBC reported.
The reading is the largest CPI gain since the 5.3 percent increase in August 2008 prior to the financial crisis that became the worst recession since the Great Depression.
“The inflation pressure we’re seeing is significant,” General Mills Inc. chief executive Jeff Harmening said at an investor conference earlier this year, according to The Wall Street Journal.
“It’s probably higher than we’ve seen in the last decade.”
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